Last week during my service design workshop for Inc. Magazine, I cited the study from Bain Consulting in which 80% of executives from large public corporations believed that they were providing "outstanding customer experiences" to consumers. I asked the group of privately-held company CEOs to guess what percentage of customers actually agreed that statement. People called out "30%," "20%," "15%!" It was like a reverse auction. And yet nobody even came close to the dismal truth that only 8% of customers agreed that they had an outstanding customer experience. You could actually hear a collective gasp in the room when I told them that the number was 8% and that the execs had missed it not by a factor of two or three but by a factor of 10!

I’ve been thinking a lot about this disconnect within large corporations. Why does it exist? I have a couple theories, and the first revolves around the old saying, "familiarity breeds contempt." It’s tough to nail down who first said that, either Aesop in a fable or St. Augustine ("vulgare proverbium est , quod nimia familiaritas parit contemptum.") And while this saying is most often associated with individuals and inter-personal relationships, I think it’s true for companies and their customers. In traditional marketing there is a mad rush to get new customers, as opposed to really understanding the customers you have, which in turn, would help you attract more customers. (more…)

Noticed this Tweet this morning from Alan M. Webber…

"Just had coffee with Wickie Meier in Copenhagen; she reports that "service design" is under-appreciated next big thing — makes sense to me!"

So who is Alan Webber ? He launched Fast Company , the fastest growing, most successful business magazine in history. He was named Adweek’s Editor of the Year in 1999, along with co-founding editor William Taylor. In 2000 Fast Company was sold for the second largest amount of any magazine in U.S. history. He "gets" what it means to be a “fast company”: the ongoing competition for the best people, for great ideas, and for the right way to think about leadership. And it’s great that he "gets" service design.

Prior to founding Fast Company, Webber was the managing editor and editorial director of the Harvard Business Review for five years. His article and columns have appeared in The Wall Street Journal, New York Times, Washington Post, USA Today and the Los Angeles Times.

So who else in the mainstream media "gets" service design? Let us know at hey @ FrontierServiceDesign dot com.

An article on the Design Week website discusses a new BBC reality TV show in which young designers compete to win a six month gig with designer, Philippe Starck. Entitled “Philippe Starck’s School of Design,” the show echoes the BBC’s “The Apprentice,” which echoes the original Donald Trump’s “The Apprentice” on NBC. (Talk about derivative!) But instead of overseeing the construction of casinos or golf courses for The Donald empire, the winner of this contest gets a six-month contract at Starck’s Paris studio.

Over 10 weeks, five female and seven male contestants live together in a house in the Paris suburbs. They range in age from 19 to 32 and most have product design backgrounds. In the first episode’s challenge, contestants search a hypermarket for products displaying good and bad design qualities. One designer contestent, Ilsa Parry, is a lecturer in 3D design at Liverpool Community College who has a design idea for a space-saving vertical coffin. Unknown as of yet is whether or not Starck has a catch-phrase similar to Trump’s, “you’re fired!”

In an era of rising unemployment, it’s interesting to see TV viewers continue to watch other people struggle to win jobs in a state of pre-packaged, well-lit reality. The good news is that big “D” designers and their craft are finally going prime-time, along with MBAs, fashion designers, cooks and folks who have dirty jobs.

Last week in Davos, Switzerland a Hong Kong-based non-profit group called Crossroads Foundation, Ltd, created a role-play exercise for some of the world’s leading CEOs and government officials in which participants played the roles of refugees. At a global conference usually known for glitz and excess, it’s interesting to read about the one hour simulation that was held in a large concrete basement near the main conference center to build empathy in these leaders.

The basement was turned into a refugee camp with barbed wire, canvas tents, armed militia and a soundtrack of nearby explosions and crying children. Participants were put into total darkness and shoved around by the "militia." Feedback from the participants was positive, although some human rights pundits did think the exercise was gratuitous and in poor taste. We applaud the sponsors for creating a simulation – albeit temporary and small – that creates even the slightest bit of empathy toward the issues involved with refugee displacement.

So where do you think all this financial mess is headed? These are traumatic times because people are losing their jobs and companies are going under and money is being lost. But these are also very exciting times because of out of this chaos will arise new business opportunities.

How do they arise? By accident? Yes, some lucky folks will be in the right place at the right time. But those who have a framework in which to think about these changes – people and firms who can understand how the tetonic plates of technology, globalization, culture, business, government, etc. all move and shift – have a significant advantage over those that don’t. Some very enlightened people think this way intuitively. For others, service design provides a framework in which to understand their business as it is today, but more importantly – how it could be in the future.

When you have some time, check out the website for the U.S. National Design Policy Initiative. This excerpt from their website sums things up:

Design serves to advance the goals of the United States’ economic competitiveness by saving time and money and simplifying the use, manufacturing, and maintenance of goods and services. It enhances democratic governance by improving the performance and delivery of government services. Thus, the American design communities offer ten design policy proposals for how we can partner with the government to help redesign America’s future.

1. Formalize an American Design Council to partner with the U.S. Government.
2. Set guidelines for legibility, literacy, and accessibility for all government communications.
3. Target 2030 for carbon neutral buildings.
4. Create an Assistant Secretary for Design and Innovation position within the Department of Commerce to promote design.
5. Expand national grants to support interdisciplinary community design assistance programs based on human-centered design principles.
6. Commission a report to measure and document design’s contribution to the U.s. economy.
7. Revive the Presidential Design Awards to be held every year and use triple bottom-line criteria (economic, social, and environmental benefi t) for evaluation.
8. Establish national grants for basic design research.
9. Modify the patent process to refl ect the types of intellectual property created by designers.
10. Encourage direct government investment in design innovation.

The report of their findings from the summit (which led to the ten design policy proposals above) can be found here: Report of the 2008 U.S. National Design Summit.

Read it over and if you agree, you can endorse the summary here.

This country is facing a number of very big problems right now, but we firmly believe that design thinking can help us (companies, cities, states, the U.S. government or non-profit organizations) sort things out, find innovative solutions and chart a path to better future. To the extent that Frontier can help make that happen with services (which now represent 75% of the U.S. economy) we are "all in."

Have the television and film industries been paying attention to the painful transition that the music industry has been going through over the past eight years? If they have been paying attention, they will realize a couple things:

1 – You can’t fight technology – There is no putting the "genie back in the bottle." No matter how hard you work to control something, there are legions of people out there who are working even harder (and for free and often with a vendetta) to undermine your control. The harder you squeeze, the harder they fight. And your hand just is not big enough to squish them all. (This applies not only to the music industry, but to dictatorial regimes as well.)

2 – You have to adapt – As much as we might like to go back to quieter, gentler times – that’s not going to happen. So if you can’t fight (see #1) then you have to adapt. Just now – after eight long, bloody years – is the music industry machine starting to adapt.

3 – Find what your customers value and provide it – It took years for the industry and many musicians to realize that there is a way to create value besides selling CDs. Live touring, merchandise, special access, works in progress, collaborations, and as-of-yet-to-be-invented models will drive value and as a result, money.  If you want to be an artist and be absolutely true to yourself, then by all means do that. But if you want to be an artist and make money from your art, then you have to create something that people value and are willing to pay for.
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I read "Subject to Change" on the plane ride home from CES. It’s a good book, written by four smart guys affiliated with Adaptive Path , a user-experience firm based in San Francisco. As with all good books, I made a bunch of notes in the margins. But one line at the bottom of page 28 really struck me; "…it’s essential to recognize the traditional practice of brand for what it is – the impression a company tries to make about it’s personality." The key word there, of course is "tries ."

It then occurred to me that brand is to customer experience as perfume is to a woman. Both brand and perfume are meant to attract – but neither represent the real service experience being offered. Give me a great service experience and then I really don’t care about your brand or your perfume. But if you seduce me with your brand and then leave me dissatified – well, then you’ve done nothing more than trick me.

I was in the booth of one of the major electronics manufacturers, last week at the Consumer Electronics Show in Las Vegas. They had a darkened area where you could compare the HDTV sets from last year with this year’s latest models. Apparently the point of this was to show us how much better these models were. The only thing is – it wasn’t any better. Yes, I’m sure from an engineering perspective it was better. But to my human eyes I could tell no difference. (Keep in mind, I am an A/V geek at heart.) I asked some other people (fellow A/V geeks I am sure) standing nearby who were looking at the monitors, "Do you see any difference?" They shrugged their shoulders and gave out a simple, "Nope." It was then that I realized that we have reached the point of diminishing returns as it relates to home electronics. How much sharper can razor sharp be, before I can’t tell the difference? At what point do my ears no longer distinguish between awesome sound and "awesomer" sound? This is why I am excited about next-gen HDTV being able to connect to the Internet. Getting new, unique and different content while I relax on my couch in front of a big sharp screen matters to me. The arms race for technological domination in home theatre is over. Now the manufacturers need to look to value-added services that consumers want, need or dream about.